Shares of Beam Inc. rose 24 percent Monday after it said it agreed to be purchased by Suntory Holdings Ltd., a Japanese beverage company. The combined company would have annual sales of
more than $4.3 billion.
The taste for bourbon – a type of American whisky made primarily of corn and typically distilled in Kentucky – continues to grow domestically and abroad.
In the U.S., sales volume for bourbon and Tennessee whiskeys such as Jack Daniels has grown 26 percent over the past decade, according to the Distilled Spirits
Council. Exports of U.S. whiskeys grew to roughly
$1 billion last year, more than double what it was a decade ago.
Suntory already distributes Beam products in Japan and has a portfolio of spirits with whiskies, including Yamazaki and Hakushu, along with Midori liqueur and other beverages. Beam, which is based in Deerfield, Ill., distributes Suntory’s products in Singapore and other Asian markets.
Suntory President and Chairman Nobutada Saji said in a statement that the acquisition will help Suntory further its global growth. In recent years, Suntory has purchased French beverage maker Orangina Schweppes Group and GlaxoSmith Kline’s Lucozade and Ribena drinks.
Beam spokesman Clarkson Hine said that for now, the deal will result in few changes for fans of Beam’s bourbons. He also said Beam, which was spun off as a stand-alone company in 2011 from conglomerate Fortune Brands Inc., will keep its current management.
“It’s business as usual,” Hine said, noting that Suntory has indicated it wants the company to “keep doing what we’re doing.”
Allen Adamson, the managing director of Landor Associates, a New York-based branding firm, said Beam can gain a competitive advantage from being part of a bigger company with deeper pockets. He said ownership by a foreign company shouldn’t hurt the all-American images of Beam’s brands.
“The trick is to maintain its authenticity, and not muck with the core elements,” he said.
Suntory will pay $83.50 per share, a 25 percent premium to Beam’s Friday closing price of $66.97. The companies put the deal’s value at about $16 billion, including debt.
The deal needs approval from Beam Inc. stockholders. Shares of Beam rose $16.14 to $83.11 on Monday.